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LONDON – A rally on Wall Street, where investors were betting that theFederal Reserve will offer new stimulus to the economy, helpedglobal markets higher on Wednesday, after the European Central Bankindicated it was not planning to provide more help to the eurozone. After weeks of dismal U.S. economic data, hopes are growing thatFed Chairman Ben Bernanke is willing to sanction another round ofmonetary stimulus, called quantitative easing, in which the Fedbuys Treasury bonds to drive interest rates lower. The Fed will later publish its so-called Beige Book, a survey ofbusinesses across the United States, and Bernanke will hold acongressional testimony. "Investors will be looking for any hint that the Fed is consideringmore monetary stimulus," said Paul Ashworth, analyst at CapitalEconomics. Germany's DAX closed 2.1 percent higher at 6,093.99 while France'sCAC-40 gained 2.4 percent to 3,058.44. The FTSE 100 in Britain,where markets were closed Monday and Tuesday for Jubileecelebrations, ended 2.4 percent higher at 5,384.11. The euro rose 0.5 percent to $1.2523. Wall Street gained in strength after a timid opening, with the DowJones industrial average up 1.7 percent to 12,334.04 and theS&P 500 adding 1.7 percent to 1,308.25. Hopes for action from the Fed helped traders overlook thedisappointment that the ECB offered no new monetary stimulus onWednesday, with its chief Mario Draghi saying it was thegovernments' turn to act to restore confidence in the 17-countryeurozone. The ECB kept its interest rates at a record low of 1 percent,though some had expected a rate cut. It also declined to offer moreultra-cheap 3-year loans to banks, as it did months ago to ease thecrisis. Instead, Draghi said there are some problems that monetary policycannot solve even though "there is a sense of concern." European leaders are under pressure to agree at a summit on June 28new measures such as a banking union that can directly rescuebanks, bypassing national governments. The cost of rescuingimportant banks risks overwhelming the public finances of somecountries — it bankrupted Ireland and threatens to do thesame with Spain. Draghi, who last week warned that the eurozone's setup is notsustainable, called once again on the European leaders to offer along-term vision of Europe over the next five to 10 years. Investors who had hoped the ECB would announce more support, or atleast signal its willingness to offer more stimulus in the future,took advantage of earlier stock gains to cash in. Looking ahead, traders will keep monitoring Europe's debt crisis,in particularly any progress in fixing Spain's banking crisis. Spain needs money to rescue ailing banks, but can currently onlyreceive such aid from the EU in a government bailout package.Madrid adamantly wants to avoid such a solution, as it would meanfellow eurozone countries and the International Monetary Fund wouldbe allowed to impose fiscal policies on the country. The country's government would like to allow the EU bailout fund togive money directly to the banks. Several other countries supportthat option, as well as the European Commission and the EuropeanCentral Bank, who are expected to propose such a measure at asummit on June 28. The Commission offered the first details of morecentralized banking supervision on Wednesday. The lingering concern, however, is that creating banking union withthe power to bail out banks directly still faces the opposition ofGermany and would take months, if not years, to become fullyoperational, as it would have to be approved by nationalparliaments throughout the eurozone. While Spain's borrowing rates edged down on Wednesday, to 6.23percent, they remain uncomfortably high, indicating investors arestill worried about the country's financial future. In Asia, Japan's Nikkei 225 rose 1.8 percent to close at 8,533.53. Hong Kong's Hang Seng added 1.4 percent to 18,520.53. Australia'sS&P/ASX 200 edged 0.3 percent up to 4,055.30, still buoyed bythe Reserve Bank of Australia's decision Tuesday to cut interestrates by a quarter percentage point. Markets in Singapore, Indonesia and Taiwan also moved higher, butthose in mainland China fell. Markets in South Korea were closedfor a public holiday. Benchmark oil for July delivery was up $1.49 to $85.78 per barrelin electronic trading on the New York Mercantile Exchange. Thecontract rose 31 cents to settle at $84.29 in New York on Tuesday. In currencies, the dollar rose to 79.08 yen from 78.73 yen lateTuesday in New York. ___ Pamela Sampson in Bangkok contributed to this report. I am an expert from kiosk-machine.com, while we provides the quality product, such as China Bill Payment Kiosk , China Digital Photo Kiosk, Ticket Vending Kiosk,and more.
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